Changes in figure behavior in 1.2.1?

[Dominick Layfield]

Might be being completely brain-dead here, but...
Did something horrible happen to the way figures are handled in 1.2.1?

I came back to using LyX after not using it for a few months, (i.e. I don't remember the detail of how figures used to work, but I don't recall ever having had any problems.) and decided to upgrade to the latest version.

According to the instructions in the User's Guide, you just do Insert->Floats->Figure, and then, with cursor placed at the start of the caption (to get caption underneath float), Insert->Graphics.

This appears to locate the image in the middle of the caption, and produces errors when I try to generate a DVI (or other compiled) file.

The only way around this that I've found is to remove the caption environment, insert the graphics, and then recreate the caption.

This seems ludicrous. Am I being an idiot?

XOX DOM